Index: src/org/eclipse/jdt/core/tests/builder/CopyResourceTests.java
===================================================================
RCS file: /cvsroot/eclipse/org.eclipse.jdt.core.tests.builder/src/org/eclipse/jdt/core/tests/builder/CopyResourceTests.java,v
retrieving revision 1.21
diff -u -r1.21 CopyResourceTests.java
--- src/org/eclipse/jdt/core/tests/builder/CopyResourceTests.java	6 Mar 2007 04:43:25 -0000	1.21
+++ src/org/eclipse/jdt/core/tests/builder/CopyResourceTests.java	7 May 2007 19:25:19 -0000
@@ -268,4 +268,28 @@
 		expectingNoProblems();
 		expectingPresenceOf(bin.append("z.txt")); //$NON-NLS-1$
 	}
+
+	//https://bugs.eclipse.org/bugs/show_bug.cgi?id=154693
+	public void testBug154693() throws JavaModelException {
+		IPath projectPath = env.addProject("P9"); //$NON-NLS-1$
+		env.removePackageFragmentRoot(projectPath, ""); //$NON-NLS-1$
+		IPath src = env.addPackageFragmentRoot(projectPath, "src"); //$NON-NLS-1$
+		env.setOutputFolder(projectPath, "bin"); //$NON-NLS-1$
+		env.addExternalJars(projectPath, Util.getJavaClassLibs());
+
+		org.eclipse.jdt.core.IJavaProject p = env.getJavaProject("P9");
+		java.util.Map options = p.getOptions(true);
+		options.put(org.eclipse.jdt.core.JavaCore.CORE_JAVA_BUILD_RESOURCE_COPY_FILTER, ".svn/"); //$NON-NLS-1$
+		p.setOptions(options);
+
+		IPath folder = env.addFolder(src, "p");
+		env.addFolder(folder, ".svn");
+		env.addFile(folder, "A.java", "package p;\nclass A{}"); //$NON-NLS-1$ //$NON-NLS-2$
+
+		fullBuild();
+		expectingNoProblems();
+		expectingNoPresenceOf(new IPath[] {
+			projectPath.append("bin/p/.svn") //$NON-NLS-1$
+		});
+	}
 }
Index: model/org/eclipse/jdt/internal/core/builder/AbstractImageBuilder.java
===================================================================
RCS file: /cvsroot/eclipse/org.eclipse.jdt.core/model/org/eclipse/jdt/internal/core/builder/AbstractImageBuilder.java,v
retrieving revision 1.110
diff -u -r1.110 AbstractImageBuilder.java
--- model/org/eclipse/jdt/internal/core/builder/AbstractImageBuilder.java	19 Apr 2007 17:11:31 -0000	1.110
+++ model/org/eclipse/jdt/internal/core/builder/AbstractImageBuilder.java	7 May 2007 19:25:19 -0000
@@ -243,7 +243,13 @@
 							if (!isOutputFolder) {
 								if (folderPath == null)
 									folderPath = proxy.requestFullPath();
-								createFolder(folderPath.removeFirstSegments(segmentCount), outputFolder);
+								String packageName = folderPath.lastSegment();
+								if (packageName.length() > 0) {
+									String sourceLevel = javaBuilder.javaProject.getOption(JavaCore.COMPILER_SOURCE, true);
+									String complianceLevel = javaBuilder.javaProject.getOption(JavaCore.COMPILER_COMPLIANCE, true);
+									if (JavaConventions.validatePackageName(packageName, sourceLevel, complianceLevel).getSeverity() != IStatus.ERROR)
+										createFolder(folderPath.removeFirstSegments(segmentCount), outputFolder);
+								}
 							}
 					}
 					return true;